| Market Development
Malaysia sukuk refinancing window opening as Fed wavers on rates The Star 14th Oct 2015
Malaysia’s two biggest banks are predicting a pickup in the country’s Islamic bond sales as companies try to refinance debt before the Federal Reserve raises interest rates. Forecasts that the Fed will keep interest rates lower for longer have given local businesses a bigger window to refinance, according to Malayan Banking Bhd and CIMB Group Holdings Bhd. MMC Corp, a Kuala Lumpur-based infrastructure firm, started marketing RM1.5bil of syariah-compliant bonds to refinance non-Islamic loans this month, said managing director Che Khalib Mohamad Noh. A successful sale by MMC will push local-currency issuance this quarter to RM3bil, nearly half the RM7.2bil total during the previous three months.
YSX provisional licences awarded Myanmar Times 9th Oct 2015
Eight companies have been offered conditional underwriting licences for the Yangon Stock Exchange, subject to paid-up capital. The exchange, which is owned by state-owned Myanma Economic Bank, Daiwa Institute of Research and Japan Exchange Group, is due to open in December. Companies including AYA Bank, Daiwa Securities Group and United Amara Bank were offered provisional licences on October 7, multiple industry sources said yesterday.
DBS among first batch of banks to join China’s international RMB payments system Singapore Business Review 8th Oct 2015
DBS will now be able to execute RMB clearing for all cross-border RMB transactions after it was selected to be among the first banks to participate in China's Cross-border International Payment System (CIPS). The launch of CIPS allows for greater access and transparency for foreign banks in China, as it will allow foreign banks to have direct access to China's onshore liquidity pool for offshore RMB transactions. CIPS is a big step in the internationalisation of the RMB and China’s financial reforms, as it improves the Chinese financial sector’s ability to conduct international RMB transactions. The system will accelerate the internationalisation of the RMB, increasing its importance as a global payment currency. “DBS is honoured to be among the first batch of banks selected to participate in CIPS. We look forward to providing greater convenience and a wider variety of RMB products to our clients. DBS’ participation in CIPS demonstrates our commitment to be at the forefront of transaction banking and to provide clients with the latest payments services and market infrastructure,“ said Neil Ge, CEO of DBS China .
Asset Management
MAS to slow appreciation of Singapore dollar Channel NewsAsia 14th Oct 2015
The Monetary Authority of Singapore (MAS) said on Wednesday (Oct 14) it will ease its monetary policy for the second time this year by slowing the pace of the Singapore dollar’s appreciation, in an effort to revive economic growth. "MAS will continue with the policy of a modest and gradual appreciation of the Singapore Dollar Nominal Effective Exchange Rate (S$NEER) policy band. However, the rate of appreciation will be reduced slightly. There will be no change to the width of the policy band and the level at which it is centred,” the central bank said in its half-yearly monetary policy statement. “This measured adjustment follows the move to reduce the rate of appreciation of the policy band in January this year, and is supportive of economic growth into 2016, while ensuring price stability over the medium term," it added.
TPP credit positive for Asian sovereigns: Moody’s New Straits Times 12th Oct 2015
The Trans Pacific Partnership deal is credit positive for Asian sovereigns, said credit rating agency Moody’s. The deal will reduce the cost of trade and open up new investment opportunities, supporting growth it said. "While full details of the agreement have yet to be published, greater access to the US for their goods should help to make Asian countries the biggest beneficiaries in GDP-relative terms," says senior analyst Christian de Guzman. Malaysia is one of the Asian countries which is part of the 12-member grouping which concluded negotiations in Atlanta last week.
Thai bourse plans to allow foreign currencies for share trading settlement The Straits Times 12th Oct 2015
The Thai stock exchange plans to allow foreign investors to settle share trading in foreign currencies as part of a move to boost foreign participations and trading activities of the overall stock market, the exchange's chairman said on Monday. Foreign investors currently can only settle the share trading in Thai baht. The Stock Exchange of Thailand wants to include U.S. dollar and Chinese yuan among its planned alternative settlement currencies, Sathit Limpongpan said. The bourse would meet the Bank of Thailand this month to propose the plan, he said. "We want to start with leading currencies and expand in the next step to other currencies," he said.
Rupiah Drops Most in Two Months as Gain Last Week Seen Excessive Bloomberg 12th Oct 2015
Indonesia’s rupiah fell the most in two months and led declines in Asia on speculation the currency’s surge last week was excessive and not supported by fundamentals. The rupiah dropped 1.3 percent, the most since Aug. 12, to 13,578 a dollar as of 10:11 a.m. in Jakarta, according to prices from local banks. The currency is still up 7.8 percent this month after advancing 9.1 percent last week in the biggest gain since 2001. The Jakarta Composite Index of shares declined 2.2 percent, set for the steepest loss in almost three weeks. The dollar’s 14-day relative-strength index against the rupiah hovered around the 30 level that suggests to some traders the local currency is poised for a reversal. Federal Reserve Vice Chairman Stanley Fischer said over the weekend that the U.S. economy may be strong enough to merit a rise in borrowing costs this year.
Yangon stock exchange risks opening under US sanctions Myanmar Times 12th Oct 2015
Myanmar's first modern stock exchange risks falling under sanctions by the US Treasury when it eventually launches this year. The Yangon Stock Exchange is not designated specifically by the Department of Treasury’s Office of Foreign Assets Control (OFAC). However US officials have clarified that under US law it would be automatically sanctioned, as it is 51 percent owned by Myanma Economic Bank (MEB), a state entity under US sanctions. Entities owned 50pc or more by one or more blocked persons on the US Specially Designated National (SDN) List are subject to US sanctions, said a US embassy spokesperson.
Malaysia to use state funds to lift stocks, rules out FX intervention The Star 11th Oct 2015
Malaysia will use its state funds to put a floor under the country's battered stock market, though currency intervention and interest rate hikes are ruled out as tools to keep sharp falls in the ringgit in check, its deputy finance minister said. The world's second-largest exporter of liquefied natural gas has been hit by the collapse in global crude prices that added to the pains of an economy grappling with mounting household debt. Foreign investors have trimmed exposure to Malaysia, causing its stock and bond prices to tank. Its currency, down 16 percent this year, remains vulnerable to further falls against the dollar as the U.S. Federal Reserve eyes raising interest rates.
Fed and local policy strengthen rupiah: Bank Indonesia Jakarta Post 9th Oct 2015
Bank Indonesia said on Wednesday that the rupiah's significant increase was triggered by a confirmation that the US central bank is likely to increase its interest rates next year, instead of this year. “Besides that, the second government economic package has also boosted positive sentiment in the market,” Andiwiana Septonarwanto, Deputy Director of the Communication Department at Bank Indonesia, told thejakartapost.com. According to Andiwiana, the market positive sentiment has increased the optimism of foreign investors as signaled by capital inflows into stock market. The rupiah jumped 420 points to Rp 13,821 per US dollar at Wednesday’s close, an appreciation of 2.95 percent from Tuesday’s closing session at Rp 14,241. The Jakarta Composite Index (JCI) followed the positive movement and managed to rebound.
SGX sees trading volume grow across all business segments in September The Straits Times 9th Oct 2015
The Singapore Exchange (SGX) saw further volume growth across all its key business segments last month, the bourse said in a report on Friday (Oct 9). Despite the market weakness and fewer trading days, total securities turnover grew 7 per cent year-on-year to $22.5 billion in September. Daily average value also rose 18 per cent to $1.1 billion. The period also saw the arrival of a new listing, TLV Holdings Limited on Catalist. This pushed the number of listed companies to 772, combining a total market value of $876 billion as of September. The new listings debuted in Singapore this year have been mostly on the Catalist board. So far this year, $185 million has been raised from new listings on Catalist, up 53 per cent compared with last year.
Currency trading seen slowing as baht stabilises Bangkok Post 8th Oct 2015
The currency trading rush that pushed trading volumes to a two-year high should subside as fading prospects of a US monetary tightening this year bring stability to the baht, says Kasikornbank Pcl. The baht has rallied 1.9% from a nine-year low of 36.67 a dollar on Oct 2 as futures traders pencil in March 2016 as the most likely date for a US Federal Reserve interest rate increase. Foreign-currency trading by commercial banks in Thailand, including spot, swaps and options, rose to US$252.5 billion in August, the most since January 2013, according to the latest central bank figures. Importers and some international investors had been "scrambling for dollars" after the exchange rate breached 35-36, said Kobsidthi Silpachai, head of capital markets research at Kasikornbank.
Ringgit Jumps Most in 17 Years as Rupiah Surges on Stock Inflows Bloomberg 8th Oct 2015
The ringgit strengthened the most since 1998 as Malaysia reported its biggest trade surplus in nine months and crude oil prices climbed, while resurgent global demand for Indonesian assets helped drive the rupiah’s biggest gain in six years. The ringgit jumped 3.5 percent to 4.2253 a dollar as of the close in Kuala Lumpur, trimming its loss for the year to 17 percent, prices from local banks compiled by Bloomberg show. The rupiah surged 3.1 percent to 13,828. Thailand’s baht was Asia’s next best performer with a 1.3 percent advance. “Positions are being reversed drastically,” said Leong Sook Mei, Southeast Asia head of global markets research at Bank of Tokyo-Mitsubishi UFJ in Singapore. Emerging-market assets are rallying this week after disappointing U.S. jobs data on Friday prompted futures traders to almost rule out a Federal Reserve interest-rate increase in 2015.
Banking
Fitch hikes Landbank, DBP credit outlooks The Philippine Star 14th Oct 2015
Fitch Ratings has raised its credit outlooks on Land Bank of the Philippines (Landbank) and on Development Bank of the Philippines (DBP) amid the country’s improved governance standards and global competitiveness. In a statement, the debt watcher said the outlooks on the two banks have been revised to “positive” from “stable,” while the credit ratings on both firms were affirmed at “BB+.” Fitch explained the outlooks were adjusted to make them in line with a recent upgrade in the Philippines’ sovereign outlook to “positive” from “stable.” With better prospects, the country is expected to have the ability to provide support to the banking sector if necessary.
Moody's upgrades two Vietnamese banks VietnamPlus 14th Oct 2015
Moody's has upgraded the ratings of two Vietnamese banks, citing their improvements in the standalone credit profile. The long-term deposit and issuer ratings of both the Vietnam Technological and Commercial Joint Stock Bank or (Techcombank) and Asia Commercial Bank (ACB) were upgraded to B2 from B3 last week. At the same time, the United States-based credit rating agency also lifted the two banks' baseline credit assessment (BCA) to B3 from CAA1. Moody's also changed the outlook of both Techcombank and ACB to stable from positive.
BSP extends relief to typhoon-hit banks The Philippine Star 13th Oct 2015
The Bangko Sentral ng Pilipinas (BSP) has extended regulatory relief and rediscount relief measures to banks located in areas affected by Typhoon Ineng that entered the country last August. Entitled to the relief are banks in provinces in Northern and Central Luzon as well as the Cordillera Autonomous Region (CAR) devastated by Typhoon Ineng identified by the National Disaster Risk Reduction and Management Council (NDRRMC). These include Ilocos Norte, Ilocos Sur, La Union, Pangasinan, Batanes, Cagayan, Isabela, Nueva Vizcaya, Bataan, Bulacan, Nueva Ecija, Zambales, Laguna, Oriental Mindoro, Abra, Apayao, Baguio City, Benguet, Ifugao, Kalinga, and Mountain Province. The BSP approved the temporary relief measures for the thrift banks as well as rural and cooperative banks last Sept. 23.
Fitch expects banks' asset quality to continue decline Bangkok Post 13th Oct 2015
Thai banks' asset quality is expected to further deteriorate over the next six to 12 months, Fitch Ratings warns. The segment that faces the most downside risk is small business, as they are vulnerable to the economic downturn and muted sentiment, said Fitch, adding it had factored into its ratings some deterioration in banks' asset quality this year because of the weak operating environment. Thai banks rated by Fitch have generally posted sound performance over the past several years, during which they have been able to improve their leverage and build up counter-cyclical general provisions. This is reflected in its stable outlook for the banks.
Banks seek partnerships at international financial conference Voice of Vietnam 13th Oct 2015
Six Vietnamese commercial banks are attending the Swift International Banking Operations Seminar (Sibos) 2015 which kicked off in Singapore on October 12. Representatives from Vietcombank, BIDV, Vietinbank, Eximbank, SHB and Pvcombank are among the 7,000 business leaders, decision makers and experts from a wide range of financial institutions, multinational corporations and technology firms taking part in the event this year. Sibos, a conference, exhibition and networking forum for the financial industry, is organised annually by the Society for Worldwide Interbank Financial Telecommunication (SWIFT), a global provider of secure financial messaging services in the areas of payments, securities, cash management and trade. Nguyen Thi Huong from the State Bank of Vietnam said it is a great opportunity for Vietnamese banks to access new banking products and services, as well as promising new partners.
Banks cutting deposit rates as idle funds add to costs Jakarta Post 13th Oct 2015
The banking industry is witnessing a trend in declining time deposit rates to lower costs that have risen due to an increase in idle funds, with more people saving instead of borrowing amid a domestic economic slowdown, according to Deposit Insurance Corporation’s (LPS) latest data. The LPS liquidity indicator report published recently shows that the average time deposit rates in early October decreased by 3 basis points (bps) to 7.17 percent compared to early September. Maximum deposit rates given by banks to their customers also dropped by 4 bps to 8.38 percent. “Restrained loan growth has created a loosening in third-party funds liquidity [idle funds], prompting several big banks to adjust their deposit rates,” LPS said in the report, predicting that the declining trend of deposit rates would continue. People prefer saving than borrowing as growth in third party funds — which include time deposits and savings — has surpassed that of lending at 14.31 percent versus 9.69 percent year-on-year (yoy) in July.
Earnings of rural, coop banks down 16.8% in first half The Philippine Star 12th Oct 2015
Earnings of rural and cooperative banks fell 16.8 percent to P1.64 billion in the first half from P1.97 billion in the same period last year amid the consolidation in the industry and the exit of weak players, data from the Bangko Sentral ng Pilipinas (BSP) showed. The interest income of rural and cooperative banks fell 19.8 percent to P9.84 billion in the first six months from P12.27 billion in the same period last year. On the other hand, interest expense plunged 29.5 percent to P2.01 billion from P2.85 billion. Non-interest income reached P2.91 billion from January to June, 3.3 percent lower compared to P3.01 billion a year ago due to lower dividend, fees and commissions income; lower profits from foreign exchange operations; and lower gains on financial assets and liabilities held for trading.
Banking sector urged to modernise Viet Nam News 12th Oct 2015
The banking sector is required to renew its business model, as well as products and services, especially e-banking, in this era of digital banking. These remarks were made by Douglas Jackson, regional director in the Southeast Asia for Boston Consulting Group (BCG), when discussing the sustainable development of the nation's banks. Jackson spoke at the annual conference, entitled ASEAN Region 2015: Banking and Finance Innovation, held in Ha Noi on Friday, saying banks that continue operating under traditional models without modernising their practices have removed themselves from the modern banking system. "The changes have been performed with an increase and expansion of several online transaction services, creating large amounts of banking data and strengthening positions of banks," he said, adding that banks throughout the world have thousands of branch openings each day.
Bankers optimistic credits to expand in fourth quarter Antara 12th Oct 2015
A survey by Bank Indonesia (BI) showed that banks are optimistic credits would grow stronger in the last quarter of this year. Higher credit expansion was already recorded for bank credits in the third quarter of this year. "The optimism is based on expected improvement in the countrys economic condition and a cut in bank lending rate in the last quarter of 2015," Executive Director of the Central Bank Tirta Segara said here on Monday. The lending rate is expected to decline to follow expected decline in the interest rates ion deposits saving and gyro, Tirta said.
Maybank Yangon to Focus on Transaction Banking, Corporate Lending and Treasury Services Myanmar Business Today 12th Oct 2015
Malayan Banking Berhad (Maybank), one of the nine foreign banks in Myanmar, said it aims to focus on transaction banking, corporate lending and treasury services in Myanmar. The Maybank Yangon branch, which has registered capital of $75 million, officially launched its Myanmar operations on October 2. Pollie Sim, Maybank’s CEO International, said that the Malaysia-based bank was in a good position to offer cross-border banking solutions by leveraging its reach. “Our focus will be on supporting wholesale and corporate clients as well as domestic banks in Myanmar with services such as deposit accounts, working capital financing, transaction banking, cash management, treasury and capital market solutions,” she said.
ANZ Banking Group Starts Myanmar Operations Myanmar Business Today 12th Oct 2015
The Australia and New Zealand Banking Group Limited (ANZ) has received the final regulatory approval from the Central Bank of Myanmar to open a branch in Myanmar, paving the way for the official opening of its Yangon branch on October 2. ANZ said it will service multinational and joint venture companies with a presence in Myanmar from the new branch, as well as international companies looking to enter Myanmar from ANZ’s network countries. ANZ CEO for International and Institutional Banking Andrew Géczy, said: “This licence approval is a final step in our plans to deepen our presence in the Greater Mekong, following the recent branch opening in Thailand. We can draw on our strengths in natural resources, infrastructure and agriculture – which match those of Myanmar – to connect global customers with the significant growth opportunities in this region.
Foreign banks advance slowly but steadily in Vietnam VietNamNet Bridge 9th Oct 2015
Though foreign banks have expanded their networks and presence in Vietnam, they still have a modest market share in Vietnam. There are 47 foreign bank branches, five wholly foreign owned banks, 53 representative offices and four joint venture banks operating in Vietnam. Joint venture and 100 percent foreign owned banks have 61 branches, mostly in Hanoi and HCM City. Meanwhile, Vietnamese banks have 2,472 branches throughout the country. SBV has approved plans to establish 100 percent foreign owned banks submitted by Public Bank Berhad (PBB-Malaysia) and Citibank (the US).
Over $500mn in liquidity reserved for three lenders acquired by Vietnam cbank Tuoi Tre News 9th Oct 2015
The State Bank of Vietnam (SBV), the country’s central bank, has asked Ocean Bank, GP.Bank, and Vietnam Construction Bank to set aside over VND11 trillion (US$500 million) in cash reserves after acquiring them, local media quoted an official from the SBV as saying at a conference in Hanoi on Monday. The money is reserved so that the three banks, which have run out of liquid assets, can pay depositors as well as lend to businesses as required, news website VnExpress cited Nguyen Huu Nghia, Chief Inspector of the SBV, as saying.
Most banks to post lower Q3 profit The Nation 9th Oct 2015
The profit margins of banks in the third quarter are likely to come under pressure from higher provisions for small and medium-sized enterprises and their measures to assist those customers. The combined net profits of eight commercial banks in the third quarter will be reported at BT39.76 billion, a drop of 15 per cent from the second quarter and 21 per cent year on year, according to KGI Securities (Thailand). Bank of Ayudhya's growth in fiscal 2015 was largely driven by the one-time transfer of the corporate loan portfolio from the Bangkok branch of the Bank of Tokyo-Mitsubishi UFJ (BTMU), so BAY was excluded from KGI's analysis. The surge in special-mention loans - those that are overdue for one to three months - especially among SMEs forced banks to help their customers. They cut interest rates and waived principal payments, which eroded their margins.
Central Bank reduces control of three banks VietNamNet Bridge 8th Oct 2015
The State Bank of Viet Nam (SBV) is reducing special control on three banks that it acquired with zero dong thanks to the banks' improving liquidity and business performance. In the first half this year, under a scheme to restructure the banking system, SBV put OceanBank, GPBank and CB under special surveillance in accordance with the law due to their weak performance and violations after acquiring 100 per cent of their stakes. Nguyen Huu Nghia, Chief Inspector at the central bank, said after the acquisition, that the commercial banks did not need special loans from the central bank to pay depositors. Nghia said that the performance of the banks in general had so far been stable and had improved, especially in terms of their liquidity.
Moody’s warning: CIMB is weakening The Rakyat Post 8th Oct 2015
Moody’s Investors Service says that CIMB Bank Bhd’s standalone creditworthiness is showing some signs of weakening, but its A3 bank deposit and senior unsecured debt ratings and the positive outlook on the ratings remain supported by a very high likelihood of systemic support for the bank, if needed. Reflecting this deterioration, Moody’s on Tuesday, affirmed CIMB Bank’s long-term deposit and senior unsecured debt ratings of A3, while downgrading its baseline credit assessment (BCA) by one notch to baa2. “CIMB Bank’s capitalisation is the lowest among large Malaysian banks, and it further weakened in 1H 2015 due to growth in risk-weighted assets, one-off restructuring costs and an increase in capital deductions for loan-loss reserve shortfalls,” Simon Chen, Moody’s vice-president and senior analyst said in a research note.
VPBank to sell 30 pct stake to foreign investors - Vietnam Economic Times Daily Mail 8th Oct 2015
Hanoi-based Vietnam Prosperity Bank (VPBank) will sell 30 percent stake to foreign investors between now and the first quarter of 2016, the Vietnam Economic Times newspaper reported, citing a statement to shareholders. The bank is also seeking shareholders' approval for selling shares in its financial and securities firms, the newspaper said.
China Bank eyes 10% growth in net income, loan portfolio this year Business Mirror 8th Oct 2015
China Banking Corp. (China Bank) has aimed for a 10-percent growth in net income to P5.621 billion this year on sustained growth in core lending. China Bank Senior Vice President and head of investor and corporate relations Alexander C. Escucha said net income should be 10-percent better than last year’s net income of only P5.11 billion. He said loan portfolio should grow by 10 percent to 15 percent from last year’s P297 billion. This year China Bank vowed to focus on delivering sustained profitability in its core banking business. He revealed consumer lending has been growing faster than corporate lending. “We see consumer lending grow 24 percent year-on-year, while corporate lending will post 5-percent growth,” he said.
E-Payments
Malaysian e-commerce growth to continue higher New Straits Times 12th Oct 2015
Homegrown online e-commerce payment gateway iPay88 Sdn Bhd, which was acquired by Japan's NTT Data Corporation recently, expects double-digit growth in e-commerce here to continue this year. iPay88 said the 50 per cent growth seen last year in e-commerce is expected to see higher growth this year as e-commerce has taken off in the country. "E-commerce is taking off because the number of e-commerce players is growing, both local and international players. "Infrastructure like broadband and smartphone penetration is also very high in Malaysia," said iPay88 Executive Director Chan Kok Long.
National payments system in the works Business World 12th Oct 2015
The framework for the envisioned national retail payments system (NRPS) could be ready by next month, a BancNet official said, in a bid to roll out the system by next year as the financial industry aims to have an integrated cashless network in the next three to five years. The Bangko Sentral ng Pilipinas (BSP) last month said it aims to finish laying the foundation of the NRPS by yearend in partnership with banks, payments providers and telecommunication companies. “We’re looking more at the framework and constitution of this national payments system. We’re targeting by November,” BancNet chairman and electronic channels group head at Bank of the Philippine Islands Manuel C. Tagaza said in a recent interview. “There are a lot of activities now because the direction has been set.
BPI targets to widen use of bank’s mobile platform Business World 8th Oct 2015
Ayala-led Bank of the Philippine Islands (BPI) is eyeing to widen the penetration rate of its mobile banking business, targeting a 40% increase in users next year from the current level as it seeks to expand services available in the platform. BPI Vice-President and Division Head of Electronic Channels Carlo Carmelo S. Gatuslao said current active users of its mobile banking platform are at “close to a million” out of BPI’s over seven million account holders. Last year, the number stood at over 600,000 and the target earlier set for 2015 is to grow its users to around 850,000. “We expect our digital channel enrollment and usage to grow. We will offer more services beyond what we have now... We’ve already surpassed our target for this year. We’ve targeted a 40% growth [in 2015] but we’ve surpassed it. Next year, it should not be less than 40%,” Mr. Gatuslao said.
Insurance
Myanmar: Foreign insurers offer liability insurance Asia Insurance Review 13th Oct 2015
The three foreign insurers which have operating licences in Myanmar are now allowed to offer liability insurance in Thilawa Special Economic Zone where they operate. The green light was granted by the Myanmar Insurance Business Supervision Committee, reported the Eleven Myanmar news website. Only life, fire and all-purpose vehicle insurance have been available from foreign insurers until now. Sompo, Mitsui Sumitomo Insurance and Tokio Marine and Nichido Fire Insurance have permits to offer their services in the SEZ.
Indonesia: Govt struggles to fund national health insurance plan Asia Insurance Review 12th Oct 2015
The Indonesian government is looking at how much to increase premiums for the national health insurance scheme by year-end. An announcement is expected shortly, reported the Wall Street Journal. The world’s largest national health insurance system faced a deficit of IDR3.3 trillion (US$243 million) last year. This year’s shortfall could deepen to IDR13.5 trillion, the health ministry has projected. Aimed at giving 250 million citizens a safety net that would encourage them to spend more freely instead of saving for rainy-day medical emergencies, the scheme has attracted more than 150 million people since it was launched in January 2014. After 1 January 2019, enrolment in the system will become mandatory.
Malaysia: More market-driven pricing for motor & fire business Asia Insurance Review 9th Oct 2015
The motor and fire insurance sectors in Malaysia will be restructured with more market-driven pricing, Bank Negara Malaysia (BNM) deputy governor Mr Muhammad Ibrahim has said. In his keynote address at the 5th Malaysia Insurance Summit in Kuala Lumpur on Wednesday, he said: “In the non-life or general insurance space, a more market-driven pricing structure will be introduced for motor and fire insurance. This will also pave the way for the development of products that can be more responsive to consumer and business needs in the two most dominant lines of business in the Malaysian general insurance sector.
EastWest gets BSP OK for insurance venture Business World 8th Oct 2015
East West Banking Corp. (EastWest Bank) has secured regulatory approval to go ahead with its planned equity investment in its joint venture life insurance company with Belgium-based insurer Ageas Insurance International N.V. (Ageas). “This is to inform the Exchange that the Bangko Sentral ng Pilipinas approved the initial equity investment of East West Banking Corporation amounting to P500 million in the proposed joint venture with Ageas Insurance International N.V. subject to regulatory conditions,” the Gotianun-led lender said in a brief disclosure to the local bourse yesterday. “We shall inform the Exchange as soon as we receive approval from the Securities and Exchange Commission and the Insurance Commission,” EastWest Bank added. Last May, the listed lender announced that it has entered into a joint venture agreement with the Belgium-based insurer Ageas to up a new life insurance company in the Philippines which is seen starting operations by the end of the year.
Market Regulation
Indonesia to Require More Capital for Most Important Banks Jakarta Globe 13th Oct 2015
Indonesia's most important banks will have to set aside more capital as a buffer against financial market volatility, according to a draft regulation. The Financial Services Authority (OJK) is proposing that systemically important banks must set aside an additional "capital surcharge", equivalent to 1 percent to 3.5 percent of their risk-weighted assets, depending on how influential they are in Indonesia's financial system. Banks will be required to set aside the capital surcharge by December, based on their financial statements as of June, according to the draft regulation, which has been made public for consultation. The new regulation would be part of stricter protocols that Southeast Asia's largest economy is planning to strengthen the financial system.
BSP tightens watch on banks’ boards, officers Business World 11th Oct 2015
The Bangko Sentral ng Pilipinas (BSP) has told elected directors of banks and financial institutions to prove they are qualified to hold these seats, the regulator said in a new order. In Circular No. 887, the BSP said elected directors have the burden to prove they meet the minimum qualifications prescribed by the central bank. “Non-submission of complete documentary requirements within the prescribed period shall be construed as his/her failure to establish his/her qualifications for the position and result in his/her removal from the Board,” the central bank said. Under the Manual of Regulations for Banks, a director should be at least 25 years old who finished college and has at least five years business experience, has attended a seminar on corporate governance, and must be “fit and proper” for the position.
Golkar Wants to Further Curb Foreign Ownership of Banks Jakarta Globe 10th Oct 2015
The Golkar Party is pushing for legislation that would further curb foreign ownership of Indonesian banks, forcing investors to divest existing shares should their ownership exceed the limit, a lawmaker said late on Friday. Under the 1998 banking law currently in force, foreign entities are allowed to own up to 99 percent of Indonesian lenders, but a 2012 central bank regulation imposes strict requirements for those owning a stake above 40 percent. M. Misbakhun -- a Golkar lawmaker on Commission XI at the House of Representative, which oversees the banking and finance sectors -- said in a statement on Friday night that the party believes the bill is necessary to reduce risks in the banking sector arising from global uncertainty and also to boost the role of domestic investors. Under the proposed bill, both foreign and local investors can own a maximum 20 percent stake in any Indonesian lender.
Banks get guidelines for responsible lending The Straits Times 9th Oct 2015
Banks have been given new guidelines to encourage them to take extra care when lending to firms that might disregard environmental or corporate governance standards. The framework released by the Association of Banks in Singapore (ABS) yesterday wants banks to highlight in their annual reports from next year how they plan to prevent lending to companies with irresponsible practices. The banks should then implement these rules by the end of 2017. The ABS guidelines provide broad principles on what banks need to do when dealing with firms in eight industries, including forestry, agriculture, mining and energy. But they do not specify actual lending policies and do not carry any penalty.
Bank Negara: 1MDB breached exchange controls, three permissions revoked The Star 9th Oct 2015
Bank Negara Malaysia has revoked three permissions granted to 1Malaysia Development Berhad (1MDB) for investments abroad worth US$1.83bil (RM7.58bil). In a statement Friday, the central bank said the permissions were revoked as the investments were obtained based on inaccurate or incomplete disclosure of information. “The Bank at all times expects full and accurate disclosure of information by applicants in considering any application under the Exchange Control Act 1953 (ECA). “On its part, the Bank concluded that permissions required under the ECA for 1MDB’s investments abroad were obtained based on inaccurate or without complete disclosure of material information relevant to the Bank’s assessment of 1MDB’s applications,” said the statement.
PDIC charter amendments may not pass due to time constraints Business World 8th Oct 2015
A proposed law in the Senate that seeks to amend the charter of the Philippine Deposit Insurance Corp. is unlikely to be passed before yearend as earlier targeted as lawmakers scramble to finish budget deliberations and debates on the law on the proposed Bangsamoro Region. Senator Sergio R. Osmeña III, chairman of the Senate Committee on Banks, Financial Institutions & Currencies, noted on Thursday the tight schedule of lawmakers in the Senate for the remaining months of the year. “[There are] no sticky issues but the Senate schedule for November and December [is] very tight -- national budget, BBL (Bangsamoro Basic Law), new debates on Mamasapano massacre, APEC (Asia-Pacific Economic Cooperation) holiday,” Mr. Osmeña said in a text message when asked on the prospects for the proposal.
VN to allow short selling of stocks Vietnam Investment Review 8th Oct 2015
In a bid to boost trading volume, authorities plan to soon allow investors to short-sell shares in Viet Nam's two stock markets, Nguyen Son, State Securities Commission's Director of Market Development Department said at a meeting with financial professionals yesterday. Short selling is when a broker lends shares to an investor at the current market price. If the price then falls, the investor can sell the shares back to the broker at a lower price, with the difference being the investor's profit. If the share price goes up and the investor sells the shares back to the broker, the investor loses money. The State Securities Commission (SSC) plans to submit to the Ministry of Finance within this month a draft circular, which aims to amend the Circular 74 issued in 2011 by the Ministry of Finance on short selling. Son said that short selling was a complicated process and required strict management to make sure it does not create instability for the national stock market.
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